A Captive Insurance Company is an entity that has as it primary purpose the financing of the risks of its owners or participants. It is licensed under special purpose insurance laws and operated under a different regulatory system than commercial insurers.
Often referred to as “Self Insurance” or “Alternative Risk Financing”, it allows insured’s to financially support and fund for a pre-determined layer of loss exposure and to pay for the future losses while improving cash flow, managing insurance cost and controlling risk that would typically go towards a third-party insurer. It is used as a financing tool to break free from the traditional insurance market.
